Unipetrol to post EBIT loss in Q1-09, betters performance of Q4-08

23-Apr-09

Czech oil refiner Unipetrol is expected to report an operating (EBIT) loss in Q1-09 although it will be smaller than the loss recorded by the company in Q4-08. The loss can be attributed to price of crude oil and its derivatives, the weaker Czech crown against the US dollar and a narrowing Brent-Ural price differential. Margins remained under pressure although some recovered slightly, as the company expects a "positive" earnings before interest, tax, depreciation and amortization (EBITDA) for the period. Faltering demand caused by a global economic crisis and resulting in poor margins, along with currency and crude price fluctuations have been reflecting on Unipetrol's performance for some time. Earnings for the period were also hit by low refinery margins and low demand for fuels. Results in the petrochemical segment were hurt by weak demand resulting in lower prices, mainly affected by a slump in olefin margins. While polyolefin margins recovered from the fourth quarter low but still remained under historical levels.